Fairfield Ledger
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Neighbors Growing Together | May 27, 2017

Numbers don’t add up for state budget

By Margaret Dwyer | May 04, 2017

To the editor:

Page 7 of the Monday, April 24, 2017 Fairfield Ledger carried an article, “Legislature puts in place more than $7 billion budget.” The article did not mention that Iowa’s revenues are projected at nearly $12 billion annually (Iowa Department of Revenue Performance Report for FY 2016).

Let’s see … $12 billion minus $7 billion equals … ? So where is that other $5 billion? Some goes to Earned Income Tax Credits, and much of it is used for corporate tax rebates.

In the corporate world, if the applicable credits, deductions and exemptions reduce the tax to less than zero, in many cases, the state of Iowa writes the corporation a check for the difference between zero tax owed and additional exemptions/deductions and credits applicable. That’s where a lot of that missing $5 billion has gone.

The intent of these rebate programs is to provide corporate incentives for economic growth and value for Iowa’s citizens. There are over 300 of these credits, deductions and exemptions.

Unfortunately, once they are approved, there are few checks and balances, no budget scrutiny, no verification that rebate activities were conducted or that the intended value for citizens was derived. Given our dire budget shortfalls over the past year (forcing loss or reduction of important services to citizens of Iowa), the corporate rebate program as it exists today is overdue for scrutiny.

Tax review and reform could have been a focus of this year’s legislature, but wasn’t. Let’s hope the next legislative session deals with this issue and others that genuinely affect Iowans.

Contact your State Senators and Representatives and let them know you want to see intelligent, thoughtful action on this item.

 

– Margaret Dwyer, Fairfield

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